Now is the time for brokers to show their true value, says principal broker
The mortgage market of 2022 is presenting a very different series of challenges to that of the previous two years – but the shifting landscape also gives brokers the opportunity to step forward and demonstrate their true value to clients, according to one of Ontario’s most prominent mortgage professionals.
Dalia Barsoum (pictured top), founder and principal broker at Streetwise Mortgages, told Canadian Mortgage Professional that rising interest rates had contributed to a more complex environment for borrowers where mortgage qualification was concerned, but that the onus was on brokers to find solutions to those obstacles facing their clients.
“It’s not a surprise that this market is very different from the market we were in six months ago, before the rates started to rise,” she said. “Every time there is an increase by the Bank of Canada, as we know, things get more challenging on the qualification front.
“For clients who are on variable and adjustable mortgage payments, they’re feeling more pressure on their cashflow. For mortgage brokers, it means that we’re spending more time advising clients on how to navigate, and when qualification has suffered, that becomes a force for us to start to think of things we may not have considered in the past to provide solutions – because the deals are no longer cookie cutter. The deals are more challenging.”
Brokers have the opportunity to provide guidance, comfort, and solutions for their clients, Barsoum said: spelling out the options for those who no longer qualify with an ‘A’ or ‘B’ lender or who are struggling with qualification due to rapidly changing property valuations.
One of the most common issues facing current mortgage holders on a variable or adjustable rate is whether they should lock in or stay the course, especially with those rates having risen precipitously throughout 2022 to date.
Advice differs for each of those clients depending on whether they feel they can shoulder the burden of further rate hikes, Barsoum said, before rates eventually start to come down (although that isn’t expected to happen anytime soon).
For those clients who would prefer to avoid further rate jumps and lock in, taking a shorter-term fixed option can be a good move, according to Barsoum, because they will then be well placed to avail of lower rates when they finally arrive down the line.
“Five-year [fixed options] are going to lock them in at the height of the cycle and if there is a future softening in rates, they’re not going to be able to benefit,” she explained. “So, if you want the peace of mind, one year is an option, two years is an option.”
Another possibility could be switching from an adjustable mortgage – in which payments rise as rates go up – to a variable one where the payment stays fixed but the allocations beneath the surface change, she added.
Purchase activity has slowed virtually across the board in Canada’s housing market this year, with the Canadian Real Estate Association (CREA) reporting actual non-seasonally adjusted activity in August to be 24.7% lower than the same month last year.
August marked the sixth consecutive monthly decline in home sales across the country – although that month’s fall was the smallest since activity started cooling in March. Barsoum’s daily mantra, though, is that “this too shall pass” and better times for Canada’s housing and mortgage markets will come around again.
“We’re all in the same boat: clients, brokers, we’re all experiencing these changes in different degrees,” she said. “So, I would say this is the time for us brokers to step up to [provide] solutions and to service.
“Despite the fact that the deals are more challenging, I always believe there is a solution. And we’ve just got to stay focused, take care of ourselves, and take care of our clients. This too shall pass – that’s my bottom line.”
In the midst of that changing market, Barsoum has chalked up an impressive array of accolades in recent times – finishing in the top 10 of CMP’s Top 75 Broker list this year, coming away with the Ontario Broker of the Year award in April’s Canadian Mortgage Awards, and recently being named among CMP’s Women of Influence for 2022.
The secret behind that success? “It’s basically finding ways to add value to clients through better conversations,” Barsoum said. “That’s really the number-one strategy that I use.”